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I'm trying to fill out a W4 for a new job, and am a little confused at the two-earners section (as I have been in the past). The very last step (line 9) says to divide the amount of withholding needed by the number of remaining pay periods and enter that amount as the amount withheld from each paycheck.

What I don't get is why would I want to withhold the full amount of withholding for the year, over only the remaining pay periods? Wouldn't I want to divide the full amount by the number of pay periods total in the year and enter that for my per-paycheck withholding amount? For example:

If I calculate an amount of $4,000 for line 8 (additional annual withholding), and my new job will only have two pay periods remaining (two December paychecks), that would give me $4,000 / 2 = $2,000 per paycheck. That makes no sense whatsoever, because I have been withholding additional amounts at my previous job at the appropriate rate all year. What makes more sense to me is to take $4,000 / 26 pay periods in a full year = $154 per pay period (or per paycheck).

Am I wrong here? Or am I misreading the form?

Thanks in advance.

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I would guess that you are misinterpreting what the form is asking you to calculate. The values you should be using to lookup the items from tables 1 and 2 are the actual wages that you will be earning this year, not your annualized salary.

Say you were earning $60,000 annually at your old job ended November 30, and are now earning $72,000 annually at your new job starting December 1st. Your HIGHEST paying job (the old job) should have paid about $55,000 ($60,000 per year * 11 months), while your LOWEST paying job (the new job) would pay only about $6,000 this year ($72,000 per year * 1 month). That's before you include the deductions and adjustments.

If you understood this correctly, you start getting paid at your new job in December, and your calculations are correct at roughly $4,000 for line 8, then it appears that you will be making over $24,000 next month alone. If that is the case, then you will probably need to have the additional $4,000 withheld, and I would recommend using some of the rest to hire a tax professional for questions like this.

  • Wow, that's worded very poorly by the IRS in my opinion. Okay, so for argument's sake, here's an example: – the-nick-wilson Nov 6 '15 at 2:10
  • I don't disagree that clarification around this would be helpful, but this section of the form is primarily for those who are working multiple jobs concurrently, or who live in a multi-income household, where the annualized salaries of both jobs should often be considered. Even in those situations, though, the withholding will differ in a partial year when you've started a job. Whatever additional withholding you elect, it would be prudent to revisit at the start of the new year and update your W-4 as needed to have the proper amount deducted going forward. – Wesley Marshall Nov 6 '15 at 3:52
  • Yeah, I think I understand what you're saying. For some reason my edit to my comment never showed up though where I put in a specific example. But overall it does sound like what I want to do (divide the $4000 by the total pay periods for my job in a year) would yield the same results that you're saying. Because I definitely am not going to make $24k over the last month of this year :) Thanks for your help! – the-nick-wilson Nov 6 '15 at 13:15

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